Thrive Capital founder Joshua Kushner and former Disney CEO Bob Iger stunned the sports world this week with a deal to buy the Los Angeles Lakers for a record $12.5 billion.
If approved, the acquisition would provide the new owners with an iconic NBA franchise that boasts 17 championships as well as ties to legends like Magic Johnson, Kareem Abdul-Jabbar, Kobe Bryant, Shaquille O’Neal, and LeBron James.
But ownership of the Lakers would also provide tax benefits. In fact, sports teams have long been considered great tax shelters for wealthy individuals.
That was not lost on Ram Ahluwalia, founder of Lumida Wealth Management, who said Kushner’s Lakers deal has nothing to do with sports teams as an asset class.
“It’s a powerful tax shield,” he posted on X on Saturday. “My guess is he is preparing to offset a boatload of carried interest income. If you own a sports team, done correctly, you can get a deduction against income. The goal in acquiring a sports team is to setup a ‘non-passive’ deduction.”
Ahluwalia pointed out that Kushner is likely facing big gains from his holdings in SpaceX, OpenAI and Stripe. Meanwhile, tax deduction benefits from owning a team are more favorable than owning real estate.
He added that Warren Buffett mastered the art of depreciating goodwill expenses from high-quality brands like See’s Candies and Dairy Queen that are owned by Berkshire Hathaway.
Similarly, when Mark Cuban was the majority owner of the Dallas Mavericks NBA franchise, he handled it very well, according to Ahluwalia.
“He also grew the equity value at the same time. Net net he transformed high income tax into lower taxed capital gains. That’s a trifecta,” he explained.
Thrive Capital didn’t immediately respond to a request for comment.
The blockbuster Lakers acquisition comes as pro teams have become hot commodities. Just last month, Silicon Valley venture capitalist Vinod Khosla agreed to buy the NFL’s Seattle Seahawks for $9.6 billion.
And in 2025, the Boston Celtics were sold for $6.1 billion, a record at the time—until Mark Walter bought the Lakers for $10 billion later that year.
By amortizing key assets like media rights and treating other assets as depreciable like contracts and the stadium, team owners can lower their tax bills.
For example, a team’s roster of players can be counted as an intangible asset that depreciates over time, generating hefty paper losses that offset an owner’s taxable income elsewhere. Similarly, depreciation on stadium infrastructure can further shield an owner’s income.
That’s possible even as a team appreciates in value while its actual business operations are also profitable.
Broadcast rights have also emerged as a major factor in team valuations, especially as sporting events have retained their ability to draw viewers and advertisers. Regional broadcast deals can be structured to allow team owners to shift income to units with better tax rates.
Thanks to long-term media deals, team revenue has become far steadier. Because of this, a team can stay profitable “regardless of the number of people that shows up” on a given night, David Silverman, a partner in Cooley’s M&A group who worked on the Celtics sale, told Fortune’s Catherina Gioino last month.
In addition, consumers are spending more on in-person experiences generally, and sports captures that spending better than most entertainment options, he noted. As a result, franchise values have compounded at a pace few other asset classes can match over the long run.
“It is being part of a very elite and exclusive club of owners that control those franchises,” Silverman said. “There are unique business opportunities that come from both being part of that club and being notable in that way.”
